On April 15, 2026, the Federal Trade Commission announced an enforcement action against one of the nation’s largest pest-control companies, Rollins, Inc., ordering the company to stop enforcing noncompete agreements against more than 18,000 workers nationwide. The FTC simultaneously sent warning letters to 13 other pest-control companies, signaling broader scrutiny of noncompete practices across the industry. The action is the latest in a series of case-by-case enforcement efforts under Chairman Andrew N. Ferguson’s leadership and underscores that, even without a nationwide rule, the FTC remains focused on noncompetes it views as overbroad or unjustified.
Background: The FTC’s Shift to Case-by-Case Enforcement
The FTC’s broad Noncompete Rule—which would have banned most noncompete clauses nationwide—was blocked by a federal district court in August 2024 and never took effect. In September 2025, the FTC moved to dismiss its appeal and accede to vacatur of the rule. Since then, the Commission has pivoted to individual enforcement actions under Section 5 of the FTC Act, targeting noncompete agreements it deems unfair methods of competition on a company-specific basis. Chairman Ferguson outlined this approach at a January 2026 FTC workshop, stating that the FTC should focus enforcement on noncompetes that do not advance a procompetitive purpose or are not narrowly tailored.
FTC’s Action Against Rollins Shows Noncompetes Still Risk Facing Federal Scrutiny
According to the FTC’s administrative complaint, Rollins imposed noncompete agreements on nearly all employees—including pest-control technicians, customer-service representatives, and other relatively low-wage workers—typically barring them from working in the pest-control industry for two years within a 75-mile radius of any of more than 700 Rollins locations across 49 states. The FTC alleged that:
- Employees had no meaningful ability to negotiate the noncompete terms and received no additional compensation or consideration for signing.
- Employees were asked to sign agreements with little or no time to review or understand them.
- Rollins aggressively enforced the agreements, issuing hundreds of cease-and-desist letters and filing lawsuits against former employees.
- The noncompetes denied job opportunities, restricted worker mobility, likely suppressed wages and benefits, and discouraged former employees from starting competing businesses.
The FTC ordered Rollins to cease entering, maintaining, enforcing, or threatening to enforce noncompete agreements. The order—which has a 10-year term—further required Rollins to provide notice to all current and former employees that they are no longer bound by noncompetes and are free to compete, including by starting their own businesses. Notably, the order excludes certain senior employees who meet a heightened threshold for access to competitively sensitive information, specifically directors, officers, or defined senior leaders who exercise policymaking authority and are eligible for equity or equity-based compensation.
Alongside the Rollins action, Chairman Ferguson sent warning letters to 13 other pest-control companies advising that their noncompete practices may cause similar competitive harms. The letters urge a comprehensive review of employment agreements—including noncompetes—for tailoring and legal compliance, noting that lower-income workers feel the injuries of overbroad noncompetes most acutely.
Chairman Ferguson’s Statement: “Not All Noncompetes Are Unlawful”
In a joint statement with Commissioner Mark R. Meador, Chairman Ferguson emphasized that the Rollins action does not signal a categorical ban on noncompetes. Ferguson stated that some noncompetes have procompetitive effects while others are anticompetitive, and that the FTC follows the general common-law rule that noncompetes are lawful when they go no further than necessary to protect specific, identifiable, valid employer interests that could not be protected without the restriction. However, he characterized Rollins’ indiscriminate “general policy” of requiring every worker to sign a noncompete, regardless of position or responsibilities, as an approach that “cries out for scrutiny under the antitrust laws.”
What This Means for Employers
The FTC described the Rollins action as part of a broader prioritization of deceptive, unfair, and anticompetitive labor-market practices beginning with the February 2025 launch of its Joint Labor Task Force. Since then, the FTC has taken action against other companies over employee noncompetes, including issuing noncompete warning letters to healthcare employers and staffing companies, and pursuing no-hire restrictions used. The Rollins action demonstrates a clear signal that the FTC intends to continue that enforcement sequence.
The FTC’s actions in the last year demonstrate that the agency’s interest in noncompete enforcement is intensifying even without a nationwide ban in place. Employers, particularly those that apply noncompetes broadly to rank-and-file, hourly, customer-facing, or lower-wage workers, should consider the following steps:
- Audit existing noncompete programs. If your organization uses restrictive covenants, now is a good time to audit their scope, duration, geographic reach, and supporting consideration. With the FTC’s Noncompete Rule vacated, state law is the controlling framework, and the landscape varies significantly: several states ban or restrict noncompetes for lower-wage workers, impose notice and/or timing requirements, and carry costly statutory penalties for noncompliant agreements. With the nuances associated with noncompetes, employers, especially those operating across multiple states, should work with employment counsel to ensure their agreements satisfy all applicable requirements.
- Reassess “one-size-fits-all” policies. The FTC took particular issue with Rollins’ blanket approach to noncompetes. Employers that require all or most employees to sign noncompetes without differentiating by job function, seniority, or actual exposure to trade secrets face elevated enforcement risk.
- Evaluate less restrictive alternatives. Consider whether legitimate business interests can be protected through confidentiality agreements, trade secret protections, or nonsolicitation provisions rather than broad noncompetes. Be aware, however, that depending on the language of alternative agreements, some states may interpret those as unenforceable noncompetes—making counsel review of employment agreements essential.
Ballard Spahr’s Labor & Employment Group will continue to monitor FTC noncompete enforcement developments and provide updates. Our group also routinely provides guidance to clients on the development and enforcement of employment agreements and litigation involving enforcement. If we can assist you, please reach out to a member of our Group.